NSAC's Blog

Welcome Back Congress: New Year, Long To-Do List

January 9, 2018

Photo credit: USDA.

Less than two weeks into the new year, and Congress already has an incredibly full plate. Both the House and Senate return to work this week (the Senate has officially been back since last week), and will need to immediately dig in their massive to-do lists, not least of which include finalizing fiscal year (FY) 2018 appropriations legislation, preparing for the FY 2019 budget, and tackling the soon-to-expire 2014 Farm Bill.

Below we breakdown what’s on Congress’s immediate 2018 to-do list, and identify what’s a stake and dependent on congressional action in the year ahead.

Appropriations, Spending Caps, and the Debt Ceiling

The end of FY 2017 was officially on September 30, 2017. For the last several months, Congress has been unable to agree on new spending levels for FY 2018, and so has been forced to pass a series of Continuing Resolutions (CR) (the most recent of which came in at the end of the 2017) in order to keep the government and essential programs running. All the CRs do, however, is prolong FY 2017 spending levels. Congress therefore has a whole lot to do in the weeks ahead to if they hope to finally set new spending levels for FY 2018.

The most recent CR keeps the government funded through through January 19 – a deadline that is now less than two weeks away. In order to pass a new appropriations bill, Congress must first reach a deal on budget caps for FY 2018 – the overall funding levels that each appropriations subcommittee (including agriculture) has to work within when setting funding levels for the year. Without a decision on this overall funding allocation, appropriators are stuck without the guidance they need to determine a total funding package, or “omnibus” spending bill as it is called, for FY 2018.

So what’s the hold up? Delays on setting overall funding levels primarily stem from disagreements regarding the funding balance or lack thereof for defense discretionary spending and non-defense discretionary funding (which includes agriculture). Many Republicans and Democrats want to see a big increase in the cap for defense spending, but nearly all Democrats and some Republicans insist that any defense increase must be accompanied by a parallel increase for non-defense discretionary spending. Thus far, negotiations between the White House and congressional leadership from both parties have yet to result in a deal.

In addition to negotiating spending levels between defense and non-defense discretionary priorities, Congress also has to negotiate a slew of other high-level issues, including:

Passing disaster funding bill for recent fires and hurricanes

Extending the Children’s Health Incentive Program (CHIP)

Negotiating union-based pensions

Stabilizing healthcare costs, as promised in the Senate as part of gaining the votes needed to pass the tax bill late last year

Supporting “Dreamers” and the Deferred Action for Childhood Arrivals (DACA) program

Extending and revising a key part of the Foreign Intelligence Surveillance Act (FISA)

Raising the debt ceiling by the end of February

Some or all of these issues could find themselves wrapped into the omnibus appropriations bill. All of them are being negotiated simultaneously.

If and when an agreement is struck to raise discretionary spending caps for defense and non-defense spending, the House and Senate Appropriations Committees will decide whether and to what extent the Agriculture Appropriations Subcommittees receive a slice of that increase. In order to address the pressures facing agriculture today — including the need for farm and operating loans, the significant soil and water degradation occurring on private lands, the lag in federally supported agricultural research, and the under-investment in rural enterprise development — Congress should ensure that the agriculture component of FY 2018 funding legislation receives a portion of any increase in the overall domestic spending limit.

For more information about the proposed funding levels and policy provisions contained in the House and Senate Agriculture Appropriations bills for FY 2018, and to see our recommendations for final negotiations, click here.

Alongside finalizing funding legislation for FY 2018, Congress will need to once again vote to suspend the debt ceiling in order to avoid a default by the U.S. Government. There is some indication that congressional leadership may try to fold a debt ceiling vote into a vote on the final appropriations package. Doing so would almost certainly lead to a revolt by the conservative Freedom Caucus in the House and therefore require that House Speaker Paul Ryan (R-WI) partner with Democrats to pass the package.

2018 Farm Bill

The current farm bill, passed in 2014, expires at the end of September 2018. The House Agriculture Committee has for the last several months been promising to schedule what’s known as a “markup,” the process during which they will debate proposed legislation for the 2018 Farm Bill and “mark it up” as part of negotiations. The Senate seems to be a bit further behind in their drafting process, but also intends to release and markup a draft in the months ahead. While there are indications that the farm bill will indeed get floor time in the House in the first quarter of 2018, there are still several complicating factors that Congress will need to sort through before the process can really move forward.

Dairy and Cotton

Shortly before the holidays, the House passed a disaster relief bill that, in addition to providing relief to areas struck by natural disasters in recent months, also contains controversial provisions to benefit cotton farmers and dairy producers. The House bill would add cotton back into the Title I commodity programs and also waive a cap on livestock insurance in order to help the U.S. Department of Agriculture (USDA) provide better dairy insurance options.

The provisions have come under fire from some fiscally conservative groups because they would represent a significant new long-term cost. Representatives and Senators from dairy states also argue that the bill does not do nearly enough for dairy. And most Democrats and some Republicans also strongly object to inclusion in the disaster package of cuts to the Supplemental Nutrition Assistance Program (SNAP), arguing that SNAP cuts have no place in a disaster bill, especially not when paired with provisions increasing farm bill commodity subsidies.

The pending Senate agriculture appropriations bill, which will eventually get wrapped into any omnibus spending bill, already contains similar provisions to the House disaster bill for cotton, and much stronger provisions for dairy. There appears to be a very good chance that the two cotton and dairy provisions will be melded, the SNAP cut jettisoned, and the resulting provisions added to either the disaster bill or the omnibus spending package.

Baseline/CBO score

Each year, the Congressional Budget Office (CBO) publishes estimates of baseline spending for food, agriculture, and nutrition programs over a ten-year window. In years when a farm bill is set to be reauthorized, the CBO estimate shows how much money would be spent in the next farm bill under a straight reauthorization. Any new spending or cost savings are then measured and scored against that baseline.

CBO is expected to release a new farm bill baseline in March, though it issues a preliminary snapshot later in January; however, any drafts of the 2018 Farm Bill released prior to March will have likely been written relative to last year’s baseline estimate. While the aforementioned changes to the dairy and cotton programs would increase the baseline for the farm bill’s commodity title (because federal spending on dairy and cotton would increase), that increase would not be accounted for in the 2017 baseline estimate. It is not clear how the Committees will account for this new spending if the drafts of the new farm bill are released before CBO publishes its March 2018 baseline estimate.

Entitlement Reform

There is an effort afoot in the House to leverage the recent tax cut legislation, that boosted deficits by a trillion dollars, to justify major anti-poverty and anti-hunger program entitlement cuts. If the leaders of this movement can garner enough support, nutrition assistance programs (i.e., SNAP) will almost certainly be part of the discussion. While congressional leadership has not yet indicated when or how they will proceed, there is growing concern that nutrition assistance programs will be targeted twice, once through the farm bill, but then again as part of this broader entitlement reform effort. Doing so would have disastrous implications for low-income individuals across the country, and would also seriously complicate the passage of a farm bill, which depends on support from those who oppose major cuts to SNAP. To date, however, there seems to be little appetite for this fight in the Senate, leaving the House majority leadership with a decision to make whether or not to proceed alone.

President’s Budget

The President’s FY 2019 budget proposal is due in early February, and could influence the debate on a new farm bill in 2018. Just this week, USDA indicated that it would soon release priorities for the farm bill, which may or may not also be reflected in the President’s budget request. Presidential budget requests often contain policy proposals, and President Trump’s last budget was no exception – on the agriculture end, it proposed elimination of several farm bill programs and significant changes to the federal crop insurance program. We will be on the lookout for what the President’s 2019 budget has to say about his vision for agriculture and for the next farm bill.

Next Steps

In the coming weeks, we expect congressional leaders and the White House to continue to hammer out a deal to raise spending caps and extend the suspension of the debt limit. If that happens before the January 19 expiration of the current continuing resolution, Congress may be able to pass an omnibus appropriations package at that time. Far more likely, however, is that Congress passes a second funding extension in order to buy more time to negotiate the larger budget deal. At the same time, the House Agriculture Committee is expected to move quickly over the next month or two to debate and pass its version of the farm bill. Stay tuned for regular updates as the process unfolds!